What size is the lot?

Here are some options and considerations:Find two SF-3 lots of the correct size next to each other.

This particular town has a minimum lot size of about 12,000 sf, with 100 feet of frontage, so it looks like the lot could be subdivided if the home now on the lot is torn down. 

Everyone has great suggestions...I would also suggest "local awareness"...If you are considering a rental strategy, use somethiing like www.rentometer.com, enter the sizes and address and see what THAT neighborhood is renting for.The other thing to do is establish a relationship with an investor friendly Realtor that can run a comparative market analysis for you to establish a resale value.

If he invests in the business, then maybe you can offer a portion of the profit.  

Also you should talk to a tax professional on the self directed portion because I know that the IRS has been cracking down on creative uses of the self directed 401K funds esp for investors who are at or near retirement. * While I am an attorney, this is not intended to be legal advice.

Don't skimp here, its very inexpensive and if you don't have enough to cover your portion, they will place a lien against your unit.

Completely depends on Location, size and level of finish - if it's in a "W" town near Boston or good school area you will be a lot higher than to would in other areas.

Really you just need to look at similar sized homes with the same bed/bath and see what finishes and floor plans the ones in the top end have.  

You will probably have to talk to several people before you get to the right person any how depending on the size of the bank.